Study: GOP plan ups seniors' Medicare tab

Apr. 7, 2011 12:00 AMKaiser Health News

WASHINGTON - Seniors and people with disabilities would pay much more for Medicare under a new plan by Republicans in the House of Representatives that's aimed at curbing the nation's growing budget deficit, a Congressional Budget Office analysis shows.

For example, by 2030, typical 65-year-olds would be required to pay 68 percent of the cost of their coverage, including premiums, deductibles and other out-of-pocket costs, according to the CBO. They'd pay 25 percent under current law, the CBO said.

The GOP budget proposal also would raise the eligibility age for the program and repeal big chunks of the health-care overhaul law that Congress approved last year.

Coming amid growing concern over the federal budget deficit, it's part of an overall GOP effort to reduce federal spending by at least $5 trillion over the coming decade.

"Washington has been making empty promises to Americans from a government that is going broke," Ryan said. Unless something is done, "the red ink is going to destroy our economy."

The proposed changes drew criticism from Democrats and advocates for the elderly and the poor. Many zeroed in on the changes to Medicare. The Ryan proposal would do away with the traditional Medicare program and shift beneficiaries into private insurance plans in 2022 with federal subsidies under a model called "premium support."

Medicare enrollees would get a set amount from the government to buy private plans. Those plans would cost considerably more than traditional Medicare, the CBO said, partly because private plans pay hospitals, doctors and other providers more and have higher administrative costs. At the same time, enrollees would pay a higher percentage of the overall cost of their coverage.

"What CBO is saying is beneficiaries would pay much less under traditional Medicare for two reasons: The overall cost of the plan would be much cheaper, and they would pay a lesser share of that less-costly plan," said Edwin Park of the Center on Budget and Policy Priorities, a liberal research center.

Ryan's proposal, dubbed "The Path to Prosperity," also would scrap the health-care law's Medicaid expansion, repeal a voluntary long-term-care insurance program and cancel an advisory board the law created to recommend changes to Medicare spending.

Kaiser Health News is an editorially independent news service of the Kaiser Family Foundation, a nonpartisan health-care policy organization that isn't affiliated with Kaiser Permanente.